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Im not a huge music buyer, but I am proud to report that I completed my first online music CD purchase (the hard to find 1978 "Streetplayer" recording by Rufus featuring Chaka Khan). This event is insignificant yet representative of the change in distribution channels taking place in many industries. Ongoing press releases (i.e., FAO Schwarz, etoys, toys.com, Toys R Us, Store of Knowledge, Hasbro, Holt Outlet) attest to the many toy retailers and manufacturers building their online presence. Even so, the volume of business conducted online in the toy industry is still miniscule given overall revenues. To date, the migration of consumers to internet channels is most profound in personal services such as brokerage and travel. Were just beginning to see the behavioral shift in tangible goods such as clothing, publishing and music. Currently, in the toy and game industry, the channel migration of greatest magnitude continues to be the movement of consumers from the traditional specialty retail shops to the supercenters. Toys R Us recent announcement that it will close 90 stores and cut 3,000 jobs confirms the economic impact of this shift in consumer behavior. Primary benefactors of the migration are discount retailers Walmart and Target. According to figures published by the Toy Manufacturers of America, Toys R Us has seen its market share of Traditional Toys fall from 19.2% to 18.4% between 1995 and 1997 (actually down from over 25% several years ago). Over the same 3 year period, Walmart and Target have jumped from 20.7% to 23.5%.
Market Shares of Selected Retailers
*Data provided by Toy Manufacturers of America Previous Article: |
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